India close to deal on nuclear reactors

Westinghouse contract to build six reactors will give nuclear power programme a boost

NEW DELHI • India expects to seal a contract with Westinghouse Electric Company to build six nuclear reactors in the first half of next year, a senior government official said, in a sign its US$150 billion (S$211 billion) nuclear power programme is getting off the ground.

The proposed power plant in Prime Minister Narendra Modi's home state of Gujarat will accelerate India's plans to build roughly 60 reactors, which would make it the world's second-biggest nuclear energy market after China.

The Modi government wants to dramatically raise nuclear capacity to 63,000MW by 2032, from 5,780MW, as part of a broader push to move away from fossil fuels, cut greenhouse gas emissions and avoid climate change effects.

The United States signed a pact with India in 2008, opening the way for nuclear commerce that had previously been stymied due to New Delhi's nuclear weapons programme and shunning of the global Non-Proliferation Treaty.

But hopes that reactor makers would get billions of dollars of new business faded after India adopted a law in 2010 giving the state-run operator Nuclear Power Corp of India the right to seek damages from suppliers in the event of an accident.

Indian officials have been trying to assuage suppliers' concerns, including by setting up an insurance pool with a liability cap of 15 billion Indian rupees (S$320 million).

A final hurdle - ratification of the International Atomic Energy Agency's Convention on Supplementary Compensation for Nuclear Damage (CSC) - is expected within weeks, the Indian government official said.

The CSC requires signatories to shift liability to the operator and offers access to relief funds.

In a statement, Westinghouse said it expected India would move towards a framework that satisfies the CSC and channels accident liability exclusively to the operator. The statement made no reference to ongoing negotiations.

A deal with Westinghouse could put pressure on General Electric, whose nuclear energy venture with Hitachi was offered a site six years ago to build reactors. GE has still not decided whether it would proceed, the official said, adding that India was keen for a decision soon. GE Hitachi Nuclear Energy said it had strong interest, and that the CSC would be "a sustainable solution to concerns about India's existing domestic nuclear liability law".

India's plans for ramping up nuclear capacity have in the past fallen far short of targets and industry officials say the aim to lift the share of nuclear power to a quarter of its energy mix, from barely 3 per cent now, is very ambitious.

Later this week, India is set to offer Russia a site in Andhra Pradesh to build six reactors, on top of the six it is expected to build in Tamil Nadu, officials have said.

REUTERS

A version of this article appeared in the print edition of The Straits Times on December 25, 2015, with the headline 'India close to deal on nuclear reactors'. Print Edition | Subscribe